A new book chronicles the massive feuds that have divided India's great business families.

As the visitors filed out of Delhi’s Lodhi Road cremation ground in the summer of 1999 after his eldest son’s body had been consigned to flames, Bhai Mohan Singh could not control himself any longer. For the first time in many years, he wept, his mind numbed by the realisation that ‘Pummy’ (Parvinder Singh) was gone forever. His son, though estranged, had after all been at the centre of the 80-year-old father’s universe for the longest time. Despite the strained relations over the past few years, Pummy would visit his father’s house often, but mainly to meet his mother. The last visit was just a month ago when Pummy assured his mother that Malvinder, her eldest grandson, would take care of her after his death.

The end was not unexpected. Parvinder, 56, had been battling the last stages of cancer for a few years and had planned out everything, including moving out to his new farmhouse just four months before his death even before the interiors were ready. A year earlier, he had got his two sons married in the span of a week. The planning was so precise that barely 24 days before he succumbed to the disease, Parvinder announced that the pharmaceutical major Ranbaxy would be headed not by his sons Malvinder (27) and Shivinder (23) but by a professional, Devinder Singh Brar.

His son’s action rattled Bhai Mohan. And that is what, many believe, drove him to assert his role as family patriarch and not let emotions come in the way of doing his duty. He wanted to show that he was the man in charge. Apart from personally monitoring the distribution of invitations to 400-odd guests for his son’s antimardas (funeral rites of the Sikh community) and making sure that everything moved with clockwork precision, Bhai Mohan wrote a letter to Ranbaxy’s board of directors and management in his capacity as the company’s founder and a prominent stakeholder. He and his wife held 5 per cent stake in Ranbaxy, while Parvinder’s immediate family had 32 per cent. His letter stated that Malvinder and Shivinder should be inducted in the company’s board. Pointing out that it was illogical not to have any family member while vetting crucial board decisions, Bhai Mohan said his grandsons were being deliberately kept away by vested interests in the management. Convinced that Malvinder was the future Chief Executive Officer (CEO), he argued that the board had to hone Malvinder’s management skills by giving him responsibilities. In an interview in the Indian Express, he said: ‘I myself groomed my eldest son right from his young days to take over the reins of the company.’ Bhai Mohan stressed that the Singh family ought to play a role in the strategic direction of Ranbaxy. His words reminded many of a similar demand he had raised many years ago which led to the famous split between him and his son Parvinder, who finally ousted him from the board in February 1993 after an acrimonious power struggle.

But Bhai Mohan lost out yet again – this time because his grandchildren refused to follow his lead. They issued a joint statement saying they wished to abide by their father’s last wish that ownership and management be kept separate in Ranbaxy. Malvinder said that he would be content holding a relatively junior position in the company, while Shivinder announced that he would join Fortis, a healthcare subsidiary. This meant that DS Brar, Parvinder’s close confidante, would continue as CEO and the Ranbaxy board would not have a single family member for the first time in its history. It is an altogether different matter that despite his protests, seven years later, Malvinder did become the Managing Director (MD) and CEO of Ranbaxy and – quite ironically – presided over the sale of the company to Daiichi. The Japanese company now considers that the Singh brothers sold them an over-priced lemon and has sold Ranbaxy to Sun Pharmaceuticals. That is, of course, another story.

The position taken by the grandchildren must have upset Bhai Mohan, so much so that in a public statement in July 2000, he said that he wanted his ‘honour to be restored’ and threatened legal action against Ranbaxy if it continued to dither on the implementation of a 1994 arbitration award on the family settlement which Parvinder had promised to follow, but never did. Former Chief Justice of India ES Venkataramiah had ruled in his arbitration award that:

(i) Bhai Mohan should be treated as a permanent invitee to all board meetings

(ii) Ranbaxy should maintain his office at his residence and provide necessary secretarial assistance consistent with his status and meet all his travel expenses both in India and abroad

(iii) Parvinder [now that he was dead, the CEO instead] should meet him at least one day every month to apprise him of all developments and seek his advice, and both should concur on all senior-level appointments.

Nothing much came out of these threats and Bhai Mohan died a bitter man at the age of 89. But some would say, he got a bit of his own back by leaving behind a will that sent tremors strong enough to rock the stately and elegant bungalows on Delhi’s Aurangzeb Road and led to a second messy battle in his extended family, with Parvinder’s brothers Manjit and Analjit on one side, and his wife and two sons on the other. But the seeds of discontent were sown long back.

New order, new waysAny professional relationship between father Bhai Mohan and his eldest son, in retrospect, seemed doomed from the start. The old man was a product of the licence quota raj and believed that networking with the rich and influential was critical for the business. He had no qualms about using his connections and was known to flex his muscles if the need arose. The son, however, was a product of one of the best pharmacy institutes in the world and was more of a global citizen. He was not steeped in the old ways of seeking and granting favours that most Indian business houses of that era seemed to practice. He also believed that in a specialised business such as pharmaceuticals, professionals who knew the business and its complexities ought to call the shots. Given their vastly different backgrounds, it was difficult for the twain to meet as each was right in his own way.

Born in Pakistan’s Rawalpindi (then part of undivided India), Bhai Mohan began his career in the construction business. He made a name for being able to spot opportunities and for his skill at winning prized contracts. In the early 1940s, his family was regarded as one of the wealthiest in Punjab. After Partition, Bhai Mohan shifted base to Delhi, and Ranbaxy, a company formed in 1937 to distribute medicines supplied by foreign companies, literally fell into his lap. Here is how it happened: Bhai Mohan, who would also dabble in money lending, came upon, and subsequently acquired, Ranbaxy for Rs 2.5 lakh after his cousins Ranjit Singh and Gurbax Singh (Ranbaxy was a fusion of the owners’ names) defaulted on a loan taken from him in August 1952. Ranbaxy was then the India distributor for a Japanese drug firm called Shionogi, which manufactured vitamins and anti-tubercular drugs.

Even though he had no knowledge of the pharmaceuticals business, Bhai Mohan could sense the potential that the industry promised. He made some smart moves after the acquisition and soon graduated from distribution to manufacturing drugs. Bhai Mohan saw a business opportunity in the manufacture of copycat drugs which, given the patent regime in India at the time, was legitimate and also a precursor to Ranbaxy becoming a global name in the generics business. For example, Ranbaxy earned big bucks with its first super-brand, Calmpose, which was nothing but a copy of Roche’s best-selling sleeping pill, Valium. This was in 1969 when the eastern Bloc countries did not recognise patents. Bhai Mohan located a company in that region which was willing to supply the drug; he re-branded it as Calmpose and sold it in India. Thus, Ranbaxy ended up making a huge killing at Roche’s expense. The wily businessman that he was, Bhai Mohan Singh grabbed at the opportunity the differences in patent laws provided. He realised that he could make any product in the world through reverse engineering. To his credit, he was enormously successful at that: consider Cifran and Roscillin – two of Ranbaxy’s products that sold in huge numbers.

His father had learnt on the job but Parvinder had studied at the best universities of the world. He was an exceptional student and had earned a master’s degree in pharmacy from Washington State University and a doctorate from the University of Michigan. One of his professors had written to Bhai Mohan to say that students as bright as Parvinder come once in 10 years. Parvinder knew the business in a manner that his father did not and refused to treat it as just another trade. He was convinced that the Indian pharmaceutical industry could become a world leader. Soon after taking over as chairman and managing director, Parvinder defined and articulated Ranbaxy’s vision which involved becoming a research-oriented global pharmaceutical company with a turnover of $1 billion by 2003.

Bhai Mohan was a proud father and his hopes understandably soared when his son returned to India from the US in 1967. Old-timers recall how he used to treat his son’s foreign education as a trophy to be showcased while dealing with suppliers and in the corridors of power. He was convinced that Ranbaxy could become one of the largest pharmaceutical companies in the world. Both father and son seemed to be working towards the same end, albeit in their own way.

Parvinder did not disappoint his father. Under his leadership, Ranbaxy spread its wings abroad and set up manufacturing facilities in several countries while its domestic business prospered, making it the most valuable Indian pharmaceutical company. Most importantly, Ranbaxy came to epitomise the Indian pharmaceutical industry’s evolution. From being a group of companies manufacturing cheap, illegal copycat drugs and supplying raw material to respected manufacturers of generic drugs and making legal copies of off-patent drugs, it transformed into a research-driven firm.

Parvinder also realised that it was essential to leverage Ranbaxy’s competitive advantages on the home turf. He restructured the company in a way that Ranbaxy started following a vertically integrated mode. At home it set up its own R&D centres (generic and pure innovation), manufacturing plants and established a strong distribution and marketing network. International operations were divided into four regions which operated as independent centres. The transformation of Ranbaxy from an India-centric organisation to a giant MNC was truly underway.

Under Parvinder’s stewardship, Ranbaxy distinguished itself in spotting change and quickly assessing its impact. Politician Jairam Ramesh, who was a friend of Parvinder Singh, wrote an obituary for him in Business Today, recalling how Ranbaxy made the transition from being opposed to product patents to becoming a crusader for a world-class intellectual property rights protection system in India as it became a global force.

Parvinder realised that there would soon come a time when India would have to toe the global line and in 1991–92, when the entire industry ranged against the Dunkel Draft which advocated a severe patents regime, he accepted the new era as a revolution that every company had to be ready for. Similarly, even as globalisation was becoming part of the strategic consciousness in corporate India, Parvinder spread the Ranbaxy footprint to 25 countries. In fact, Ranbaxy had made its foray into international waters way back in 1968 when, constrained by a price-controlled regime, it looked for markets abroad. It started getting into marketing alliances with distributors abroad and applied for DA approvals. That was the company’s first global step. Singh also realised early enough that in order to compete with international players, Ranbaxy would need to focus on cost management. For a vertically integrated company like Ranbaxy, economies of scale rake in huge cost advantages, particularly in bulk drugs. At that point in time, Ranbaxy was manufacturing 25 pharmaceutical products in-house, and its annual capacity of 2,568 tonnes of bulk drugs clearly made it a globally competitive player.

Divided houseSo thrilled was Bhai Mohan with Ranbaxy’s success under his son’s guidance that he went in for a family settlement in December 1989. The oral settlement provided that Parvinder and his family would get the ancestral property on 1 South end Lane comprising 2,420 square yards of land, along with an independent dwelling unit. Manjit, the second son, would get a similar property on 2 South end Lane. The main house at 15 Aurangzeb Road would stay with Bhai Mohan and the adjacent open land (commonly called the tennis court plot) would go to Analjit, the youngest son. However, Analjit was allowed to reside in a portion of the main house until he constructed his own house on the plot. Since Analjit’s share was bigger than that of his brothers, it was decided that the tennis court plot would be divided between Parvinder and Manjit. Bhai Mohan also decided to divide his companies among his three sons. Predictably, Parvinder got Ranbaxy, Manjit got Montari industries (which among other things put up a plant for basic chemicals inside the sprawling Ranbaxy complex at Bhai Mohan Singh Nagar in Punjab) and youngest Analjit got Max India (which supplied a key ingredient to Ranbaxy and also got into BoPP [biaxially oriented polypropylene] films’ manufacturing). Analjit also got the Okhla plant, which was Ranbaxy’s first manufacturing facility.

The seeds of the dissension, say insiders, were sown then. Since Ranbaxy was clearly the jewel in the crown, Manjit and Analjit felt let down. Their complaints to their father went unheeded because, for Bhai Mohan, Parvinder could do no wrong. The brothers’ feelings of having been given a bad deal were not entirely unfounded. Montari industries was not getting anywhere and Manjit’s pet project of setting up a hotel on the family’s Aurangzeb Road property proved to be stillborn. Manjit’s grouse was that Parvinder had not pushed for the project hard enough and refused to pull strings for getting the required permission from the municipal body.

Meanwhile, Analjit’s company was not doing particularly well. The BoPP film business was floundering because of intense competition that resulted in steep price cuts. But what hurt him most was Ranbaxy pulling the rug from under his feet by deciding to set up its own factory for producing 6-APA (the penicillin nucleus), instead of sourcing it from Max India, in order to achieve cost efficiency. This was a big setback for Analjit as Max India received almost 60 per cent of its business from Ranbaxy, forcing the youngest brother to charge Parvinder with reneging on his commitment to support the company.

Parvinder’s sudden move surprised Bhai Mohan as he had broached the issue with him two years ago because Max India was making more money by selling 6-APA than Ranbaxy was by selling the finished product. Parvinder had told his father that he wanted to set up a similar plant under Ranbaxy, but Bhai Mohan had refused to give his consent. Parvinder believed that his father was being partial but left it at that. But he did not abandon his plans; he simply kept his father in the dark about them. This development did not prevent Bhai Mohan from intervening again on Analjit’s behalf, but his instructions to Parvinder fell on deaf ears. For the first time, the father felt short-changed and the brothers felt Parvinder was perhaps taking them for granted. Though he avoided badmouthing his elder brother in public, Analjit was convinced that Parvinder just did not want his company to succeed -- a feeling reinforced by Ranbaxy’s vicious reaction after Max India recovered from the shock and later became a fairly large player in generic medicines. Parvinder’s attitude towards him improved vastly when Analjit decided to gradually exit from the pharmaceuticals business and move into telecom; however, that later led to a long-drawn, messy legal battle that continued even after Parvinder’s death.

But the real tension between Bhai Mohan and his eldest son began when Parvinder made another big change in the way Ranbaxy was being run: he put in place a team of professionals and gave them full freedom in running the company. For him, as far as the company was concerned, the family came second. it was clear that Parvinder had made special efforts to rope in outside talent. He brought in DS Brar, who became the company’s managing director after his death, and Brian Tempest, who became president and later managing director of Ranbaxy. In 1995, barely four years before he passed away, 80 per cent of Ranbaxy’s sales came from abroad, which was a clear testimony to the man’s vision. His own metamorphosis was quite remarkable too. Just as he had changed his views on the patent regime, he transformed his managerial style from an authoritarian approach in the early 1990s to a consensus-driven method in the mid-1990s. He was quick to understand that in order to attract talent, the company’s top management had to be empowered and a strong middle management cadre had to be developed. That perhaps explained the smooth succession of DS Brar as the company’s CEO after Parvinder’s death.

Excerpted with permission from 'Business Battles: Family Feuds That Changed Indian Industry' by Shyamal Majumdar and published by Business Standard Books.